Posts Tagged ‘financial aid’

Most college admission officers will tell you, from the spring semester of a student’s junior year through the fall semester of that student’s senior year, they should be heading full tilt towards college. What does that mean? It means this is the time for students to get serious about the college selection process. Here is a timeline, to help you know what to expect when you are expecting to go to college.

February:

If possible, start visiting colleges. In order to do that, you need to speak with your guidance counselor or college adviser and craft an initial list of schools. Possibly take the ACT for the first time, if you haven’t yet. Register for the March SAT. Prepare for both tests.

March:

Most high schools begin their course selection for senior year. Remember to take a challenging curriculum. Register for the April ACT. Continue studying for both tests. College Visits! If you want to play sports in college, start contacting coaches.

April:

Register for the May SAT or SAT II’s. You will need to take the SAT II Subject Tests if you are applying to some colleges. If you are taking an AP test that correlates with an SAT II test, then I recommend you take the SAT II in May, as the May test date is right in the middle of AP Exams, and all the content will be fresh in your head. If you have registered for it, take the ACT test. Continue your college visits and start to narrow down your list of schools.

May:

Take the SAT or SAT II’s, if you have registered for the test. Register for the June SAT or SAT II, or ACT. Study for the tests! Get your results back from the April ACT or the May SAT. Decide if you need to take the test again, and what you need to study. Start studying for your final exams. Junior year is the last full year of classes that the colleges will see. Your grades are always the primary factor in the decision whether to admit you to college or deny you. Start planning what you are going to do over the summer. If you think might want to have one of your current teachers write you a letter of recommendation, ask now, so he or she can write the letter over the Summer.

June:

Take your high school exams, if you haven’t yet. Take the SAT or SAT II, or the ACT. Most colleges are out of session now, so visits might not be as effective as when classes are in session. But, it is better to visit in the Summer than to never visit at all. Review your test results and plan which tests you need to retake in the Fall and how you are going to prepare. Contact college coaches again to let them know which camps, tournaments, etcetera you will be attending over the Summer.

July:

Have a little fun! OK, now back to work. Review your of schools and start narrowing it down to the final schools to which you are going to apply. Start writing your personal statement or college essay. Work a summer job, go to a summer program, or perform some community service. Make certain to stay active.

August:

The Common Application becomes available. Start an account online, and start filling out your application. Work on your college essay! The best writing takes abundant rewriting, so be sure to give yourself enough time to write a good essay. Get a list together of all school requirements for the schools to which you are applying (how many teacher recommendations, extra essays, interviews, et cetera). Touch base with any teachers you have asked to write a letter of recommendation for you. You can now provide them with the Common Application’s Teacher Evaluation form. Visit colleges. Interview for college. Decide if and where you will apply Early Decision and or Early Action. Study for standardized tests. Register for September ACT.

September:

Keep up your grades. Put finishing touches on applications. Continue college interviews. Request teacher recommendations. Finalize your college list. Review the list to make sure you have at least one admission “safe” school and one financial “safe” school. If you do not have a financial “safety”, use CollegeTreasure.com to find one. Take ACT again if necessary. Register for October SAT, if necessary. Study for standardized tests.

October:

Take SAT and ACT if necessary. Request transcripts from your guidance office. Finalize and submit applications for your Early Action and Early Decision schools. Continue visits and interviews. Send thank you notes to anyone you had interviewed with previously. Make certain you have requested your letters of recommendation. Send thank you letters to teachers who have written you recommendations. Check on financial aid deadlines to the schools to which you are applying. Register for November SAT, if necessary.

Lawmakers in the House of Representatives levied a $5.7 billion cut to the Pell Grant program, which provides aid to low and moderate income students. The changes, if passed, would take effect in the 2011-2012 school year. The amount of aid for the most needy students would decrease from $5,500 to $4,705, a difference of $845.

If the bill becomes law, over 9 million students will have a reduction in their federal funds. Also, approximately 1.7 million students who receive small Pell Grants will likely be made ineligible. Approximately 27 percent of U.S. college students currently receive Pell Grants. The primary cut to the Pell Grant program would be the year-round provision which allows recipients of the grant to receive more than one per year.

In general, the most needy students are barely able to pay their bills, and losing $845 a year would be a significant loss to them. These students will be forced to take out bigger loans. Pell Grants have allowed many part-time students to attend college on a full-time basis. A reduction in the Pell Grant may force some of these students to return to their part-time status.

Many students will be forced to work longer hours, which may decrease their study time and affect their grades. Other students may decide to pass on a bachelor’s degree and instead go for a less expensive associate’s degree from a community college. Pell Grants are also provided to working low-income adults who want to go back to school to specialize in something. These folks may decide to skip college altogether.

Some colleges and universities will find ways to make up for the loss in Pell Grant funding. For example, Thomas McWhorter, the Executive Director of Financial Aid at the University of Southern California, said his office would use other university need-based aid to fill gaps caused but cutting Pell Grants.

An article at the Chronicle of Higher Education website stated that the spending bill for the 2011 fiscal year, passed by the U.S. House of Representatives, would not only slash Pell Grants in the short term, but would also reduce funding of the program by $64 billion over the next decade (according to the Congressional Budget Office).

There is plenty of financial aid available for worthy graduate students, as long as they apply for it as early as possible. Graduate students taking out loans need to be realistic about the job opportunities and additional income generated by obtaining a graduate degree.

You can typically save thousands of dollars by enrolling in a graduate degree program at a public university in the state where you’re a legal resident. Also, some states have reciprocal agreements with neighboring states which lets each state’s residents attend their colleges and universities at state tuition rates. For more information contact your state department of education or some schools of interest. Some states consider out-of-state students as residents after they have attended the school for one year.

Government Assistance

Federal Perkins Loans: Need-based program.

Subsidized Federal Stafford Loans: Students must have financial need as determined by their school.

Federal Unsubsidized Stafford Loans: Not based on financial need.

Cooperative Education: Combines education with an off-campus job related to the student’s program.

Work-Study: Need-based program in which the college finds jobs for students. Salary is usually close to minimum wage.

Graduate Stafford Loans

Graduate Stafford Loans are fixed rate loans for graduate students attending a college or university on at least a half-time basis. These loans are one of the lowest-cost ways to pay for graduate school. Graduate students using Subsidized Stafford Loans are not charged interest before they begin repayment or during periods of deferment.

Graduate PLUS Loan

The Graduate PLUS Loan is a non-need credit based loan, guaranteed by the Federal Government. Students can borrow the total cost of graduate school, including tuition, supplies, room and board, travel, and lab expenses. It’s a fixed rate student loan and payment can be deferred while students are attending college.

School Financial Assistance

Many colleges and universities offer teaching assistantships, research assistantships, and administrative fellowships. These positions typically include tuition waivers and some of them offer health insurance.

The recipients of departmental fellowships and scholarships are often determined by the departmental chair and not the financial aid office. Prospective graduate students should talk to a department staff member who’s knowledgeable about financial aid opportunities.

Perhaps the best type of college based financial aid is the fellowship. It’s a cash reward that doesn’t need to be repaid and typically doesn’t require the student to work. Most are based on an excellent academic record, however some are based on financial need. Fellowships usually include a stipend.

Corporations

Many companies sponsor tuition assistance programs. According to IRS regulations, employers can provide up to $5,250 for each employee per year on a tax-free basis. Additional employer tuition assistance is taxed. Employers may restrict the choice of a major to a subject related to the employee’s current or future position at the company. Some employers stipulate that the employee work for the company for a specific length of time after obtaining the degree.

Foundations

The Foundation Center in New York City publishes a reference book about graduate study financial aid. Grants provided in different fields are included in Grant Guides, a fee-based databank.

The National Research Council provides hundreds of fellowships of up to $14,000 per year for students in the natural sciences, social sciences, engineering, and mathematics.

Mellon Fellowships cover tuition and provide stipends for graduates students in the humanities.

Medical School

Some of the loans available for Medical School are MedSHARE-Nellie Mae, AAMC Medloans-Alternative Loan Program, and Medical Access Loans-Access Group.

Business School Loans

Some of the loans available for business school are MBADHARE-New England Loan Marketing Association-Nellie Mae, Business Access Loan Program-Access Group, and M.B.A. Loans/Tuition Loan Plan.

Online Resources

There are numerous online resources that help students find graduate education funding, and these include the following:

National Association of Graduate and Professional Studies

FastWEB

Thomson Peterson’s Graduate School Planning

The Foundation Center

Catalog of Federal Domestic Assistance Programs

Education World

FinAid!

Education World

Putting together the best financial aid package requires a lot of research. However, taking the time to do this research could save you a lot of money on your graduate education.

College is the hope of all young people who want to get ahead in life and obtain a better job with higher pay in the future. A mix of today’s economy and rising tuition prices make it hard for everyone who wants to go to college to be able to attend. But it is not impossible. Public colleges generally have lower tuition than private schools, but often lack the prestige of their private counterparts. However, one of the advantages of attending a private college is that they generally offer more tuition discounts than public schools.

Income-based discounts

First of all, most private and public colleges offer some type of needs-based financial assistance. However, because public colleges often have lower tuition to begin with, they tend to offer less dollar amounts than private colleges. One of the reasons public schools can offer lower tuition is that they are subsidized by taxpayers. Private schools, on the other hand, don’t rely on taxes for support. Rather they generate income through alumni, donors, and the prestige of their faculty, as well as the tuition of students. So, in general, private college tuition is higher, but those colleges are more likely to offer large amounts of financial assistance to promising students who otherwise might not be able to afford the cost. For example, Ivy League colleges, like Harvard, Yale, and Stanford, offer needs-based tuition assistance to smart, yet underprivileged, students.

Religious and group affiliation

Private colleges can also offer more tuition discounts because they are able to offer discounts based on religious or group affiliation. Public institutions cannot offer tuition discounts for religious or group affiliation, but because private intuitions are not funded by public money, they have much greater discretion in offering tuition discounts. For example, Brigham Young University offers discounted tuition to members of the Church of Jesus Christ of Latter-day Saints, and many other religious-based and bible colleges offer discounts to students who are members of a certain faith. Private colleges can also offer discounts to members of certain professional or social organizations.

Special incentives

Lastly, private colleges are much more likely to offer tuition discounts as special incentives to specific students. Public institutions often have policies regarding tuition discounts that outline specific requirements that they cannot deviate from and still receive tax funding. On the other hand, private institutions can offer tuition discounts to any student they feel is valuable, desirable, or brings certain skills or prestige to the school. For example, if a student has been accepted to multiple colleges and universities, a private college may offer a tuition discount as an incentive to that student, if they feel the student would be a valuable asset to their school. These types of tuition discounts are offered on an individual basis and are not generally offered to large groups of students.

If you are contemplating going to college but are worried about the cost, it might be worth it to check out the extra assistance that private colleges may be able to offer you.

Gunter Jameson writes about several topics including travel, minimalism and online classes.

The University of New Haven is a Liberal Arts college with an emphasis on Career Preparation.

The financial aid application process can be exhausting and complicated. Some students, through preparation or chance, will find the process easy because they have at their disposal everything that they need. However, many are left confused and alone five minutes before their colleges’ financial aid application deadlines. If you read (and use!) the following list, you will be one of the former rather than the latter.

Juniors:

The good news: You can take your time! Set aside 30 minutes each day and begin to browse through scholarships. Apply for all of them that you can find, which won’t be many compared to the number that you’ll find next year.

The bad news: It’s difficult to stay motivated during junior year, and your likelihood of winning multiple scholarships is low. Remember, financial aid is a marathon not a sprint; hang in there!

·Necessary Information:

·Your parents or guardians’ complete tax returns and W2 Forms

·A list containing the net value of each of their assets, including home value but excluding tax-exempt, 401K type retirement plans

·Draft a rough list of the colleges to which you plan to apply, and check their financial aid offerings and requirements.

·Begin to consult with your high school counselor (make him or her your friend).

·Consult with your parents’ financial advisor, their tax preparer, or a family member who knows a lot about finance. Ask questions about the taxability of specific scholarships and financial aid components in order to get a better idea of how much college will cost.

Seniors:

The good news: You are the prime target for most scholarships! Seniors in general are more likely to win scholarships than students in any other grade, and it will be easier for you to start a confidence-snowball.

The bad news: The second semester of senior year is the 11th hour for financial aid. Get ready for late nights and weekends of essay writing. Just remember, many students will be in the same position.

Necessary Information:

·Your parents or guardians’ complete tax returns and W2 Forms

·A list containing the net value of each of their assets, including home value but excluding tax-exempt, 401K type retirement plans

·Finalize your list of colleges and figure out the net cost of each. Carefully read each college’s financial aid application instructions (you’ll submit much of the necessary information when you apply to each school, unless you plan to do so early).

·Consult extensively with your high school counselor about financial aid options, and ask him or her to proofread your applications.

·Pose any last-minute tax related questions to your parents’ financial advisor, their tax preparer, or a family member who has extensive knowledge of personal finance.

The financial aid application process can be taxing and confusing. However, if you use the checklist outlined above, you will have an advantage over many applicants.

The American Opportunity Credit is one of the best education related tax incentives, and knowing how to use it can save qualifying taxpayers up to $2,500 per year.

Any part or full-time student who attends a postsecondary institution eligible to participate in federal student aid programs (this includes nearly all universities, colleges, and technical schools in the United States) may qualify for the credit. A qualifying student must also have been enrolled in postsecondary courses for fewer than four years prior to any year in which he or she uses the deduction. In other words, students are usually eligible for the credit during their freshman, sophomore, junior, and senior years of undergraduate studies but not during graduate school. Parents may claim an American Opportunity Credit for each dependent child enrolled in a post-secondary institution; however, a student and his or her parents may not claim the credit simultaneously. Additionally, one cannot claim both the American Opportunity Credit and the Hope Credit.

The amount of the rebate is based on the amount a student (or his or her parents) spends on qualifying expenses during a particular year. Qualifying expenses include tuition, fees, and books and supplies necessary for a student’s program of study. The cost of room and board is not considered a qualifying expense. Any expenses paid by a scholarship or grand do not count toward the credit.

The exact amount of the tax credit is given by the following formula: 100% of the first $2,000 in expenses and 25% of the next $2,000. In other words, if a student has $4,000 or more in qualifying expenses in a specific year, he or she may claim the maximum $2,500 tax credit; however, if the student has only $3,000 of qualifying expenses, he or she may only claim a $2,250 credit. Up to 40% of the credit is refundable; thus, if a student needed to pay no income tax and could claim an American Opportunity Credit of $2,000, he or she would receive a refund check for $800.

Cutting through the IRS jargon, the rules for the credit are essentially as follows:

·Almost any student in the first through fourth years of postsecondary education may claim the credit.

·Parents of a dependent student may claim the credit; however, in this scenario, the student cannot also claim it.

·Students may not claim an American Opportunity Credit in addition to a Hope Credit or tuition and fees deduction.

·Costs paid by a scholarship or grant are not considered qualifying expenses.

·Nearly all costs (except cost of living expenses and room and board fees) related to necessary courses are considered qualifying expenses.

Over four years, the American Opportunity Credit could save a student’s family up to $10,000. However, in order to accrue these savings, one must be aware of the credit’s guidelines and keep a record of qualifying expenses. Be sure to look into the proper tax software to help you get the most deductions possible.

During the last few months, newspapers have been filled with articles about how the recent healthcare reform bill will affect different groups of Americans. They mention the elderly, the young, the rich, the poor, the majority, the minority, the Democrats, and the Republicans. However, many of these reports fail to mention college students, who will be affected by a piece of legislation attached to the healthcare bill. This legislation will have an immediate impact on students and could make a lasting mark on the student loan industry.
Most changes included in the bill (called the Student Aid and Fiscal Responsibility Act or SAFRA) will save college students money. Primarily, SAFRA discontinues the program that allowed private banks to offer federally backed student loans, mandating that all federally backed student loans be taken directly from the government. However, private, nonprofit organizations will still be allowed to service the loans. This will reduce the amount of fees that students have to pay while maintaining a similar level of customer service. The act also caps the maximum monthly loan payment that the government can demand after the recipient graduates at 10% of his or her income. The Congressional Budget Office has stated that these changes will save the government about $61
billion over the next 10 years. Under the legislation, most of these savings will go toward raising the size of the maximum Pell grant from $5,550 to $5,975 by 2017 (it will begin to rise in 2013 by a yearly amount that is based on changes in the Consumer Price Index). Without this legislation the maximum Pell grant would have fallen to a mere $2,150 by 2011.
Though SAFRA will help the average student, many claim that its provisions will make student loans tougher to repay. There’s no question that federal student loans are slightly cheaper when taken directly through the government. However, private banks were able to compete with the government by offering repayment
incentives and missed-payment forgiveness. SAFRA will eliminate these things by removing private banks from the government-backed student loan market, but
little evidence exists to suggest that this will significantly raise the overall student loan default rate, especially since the bill lowers the cap on the monthly payment that the government can demand.
Students will need to make a few changes in order to adapt to the new legislation. All recipients of federal student loans will need to sign a new Master Promissory Note with the Department of Education (parents will also need to sign a new one for any student loans under their names). Many colleges have already begun to hold workshops that explain how to do this. Anyone who took a
federally backed student loan through a private bank should also thoroughly review his or her repayment plan to ensure that it has not been affected.
Though SAFRA will have an immediate and lasting impact on the student loan market, it will not significantly affect financial aid eligibility requirements or the amount of aid that college students receive. However, those who have or may need student loans should review applicable guidelines and sign a new Master Promissory Note.

You should consider academic, social, and financial factors (probably in that order) when deciding whether to apply to a school. However, as acceptance letters begin to arrive in March, financial aid will become one of the major considerations you utilize in making final college plans. That is why it’s important to know some basics about financial aid awards. Though two schools
may require equal family contributions, one may have inflated its aid package with unsubsidized student loans and work study programs. Knowing the precise
makeup of your financial aid options will allow you to choose a better college and avoid hassle after school has begun.
You likely submitted some financial information to each school shortly after applying; thus, they all have a rough idea of what your family can afford.
Because the schools that accept you won’t make unreasonable financial demands (they want you to enroll) and obviously don’t want to throw money away by
helping the financially capable, all of your financial aid awards will probably demand similar family contributions. These awards can differ greatly, though, in their ratios of gift aid to self-help aid.
Any sort of “free” financial aid, primarily grants and scholarships, constitutes gift aid. Grants are often tax exempt and have few requirements. Scholarships
have more requirements and may be taxable; however, the amount of the tax is usually negligible and most students can easily meet the requirements (for
example, enrollment in four classes and a GPA better than 2.0). Self-help, on the other hand, is barely financial aid at all. It is more like an institution-endorsed payment plan that helps you find a work-study program or
appropriate student loans. You will be required to pay back self help aid through work or loan payments.
You should also consider a school’s cost of attendance (COA) when evaluating financial aid offers ($15,000 goes a lot further toward a COA of $17,000 than $16,000 does toward a COA of $30,000). The estimated cost of attendance takes into account tuition, room and board, and some estimate of other living expenses. Subtract the amount of gift aid a school offers from its estimated
COA and look primarily at this figure when considering a school’s financial aid package. It represents the amount of money that you and your family will actually have to pay the institution.
Picking a school can be as difficult as applying. However, with the above information, you can easily discern the real amount of financial aid schools
are offering. This adds clarity to the process and helps you pick the best college.

Are you interested in becoming a teacher? Are you willing to teach in a high-need subject area in a low-income school? If so, you may be eligible for the Teacher Education Assistance for College and Higher Education (TEACH) Grant. The TEACH program was created in 2007 to help provide highly qualified teachers to low-income schools for the most needed subjects. The grant is a non-need based program (meaning you can qualify no matter what your income), provides up to $4,000 each year and can be renewed each year for a total of $16,000 for undergraduate students and up to $8,000 for masters students.

The grant is provided to students who intend to teach in either a public or private elementary or secondary school that serves low-income students. Low-income, for the TEACH grant, is defined as any school receiving Title I funding or on an Indian reservation. You can search for which schools are identified as “low-income” in your area by visiting: www.tcli.ed.gov.

Recipients of the TEACH grant must also work in a high-need or teacher shortage field. These fields are defined as subject shortage areas, not geographic areas (unlike some other programs). The TEACH program defines national high-need fields as: Bilingual Education or English Language Acquisition, Foreign Language, Mathematics, Reading Specialist, Science and Special Education. However, recipients can also work in state-wide or local high-need subject areas, which often provide a much broader list of subjects. You can see a complete list of state-by-state subject need areas here: www.ed.gov/about/offices/list/ope/pol/tsa.doc.

TEACH grant applicants must work as a highly qualified teacher in a high-need subject at a low-income school as defined above for at least 4 years within the first 8 years after finishing college or grad school. Here are the other eligibility requirements to receive a TEACH grant:

Must complete a FAFSA (though you do not have to demonstrate financial need)

Must be a US citizen or eligible non-citizen

Must be enrolled in a school that participate in the TEACH program (which is most of them)

Must be enrolled in coursework that is necessary to becoming a teach or building your knowledge in the field you want to teach

Much sign a TEACH Grant Agreement to Serve (which just says that you understand the conditions of the program)

Must meet certain academic achievement requirements, which usually means maintaining a minimum 3.25 GPA in High School or in your first year of college OR scoring above the 75th percentile on a college admissions test

It’s important to be sure that you want to be a teacher before taking the TEACH grant, because if you do not fulfill the service requirements of the grant or you decide you do not want to be a teacher, the TEACH grant will be converted into an Unsubsidized Stafford Loan- meaning you will have to repay the cost of the grant with interest. But if you are sure you want to teach and you are willing to spend a few years as a teacher in a high-need subject at a low-income school, the TEACH grant can be a great way get money for college without having financial need or extremely high test scores and grades. You can find out more about the TEACH grant by visiting: https://teach-ats.ed.gov/ats/index.action.